SUBRAMANIA IYER N N Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is an assessee under the Wealth-tax Act, 1957. For the assessment year 1970-71, he submitted a return of his net wealth before the second respondent, the Wealth-tax Officer, Palghat, THE return related only to his non-agricultural assets. He did not include any agricultural assets in the return on the ground that all his agricultural lands were in the possession of tenants, and the said lands vested in the State Government on January 1, 1970, by virtue of Section 72 of the Kerala Land Reforms Act, 1963, which was before the valuation date. He claimed that the compensation payable by the Government for the said lands was not net wealth in respect of the year to which the assessment related. THE second respondent rejected the claim, and made an assessment against the petitioner by his order, exhibit P-3, dated March 19, 1971, by including in his net wealth a sum of Rs. 1,68,000 on account of compensation obtainable by him from the Government. In arriving at the above figure, the second respondent stated that, if the tenants chose to pay the price of the holdings in lump under the Kerala Land Reforms Act, it was sufficient that they paid twelve times 50% of the annual rent, and that this amount could be safely fixed as the net value of the compensation on the valuation date. Pursuant to the above assessment, the second respondent issued to the petitioner a notice of demand, exhibit P-4, of even date. He also issued to the petitioner another notice, exhibit P-2, of the same date calling upon him to show cause why a penalty should not be imposed on him under Section 18(1) of the Act on the various grounds mentioned therein. THEreupon, the petitioner filed this writ petition to quash the above assessment and the two notices.

(2.) THE assessment and the notice of demand are attacked only in so far as they relate to the inclusion of the compensation payable by the Government for the agricultural lands as part of his net wealth. In this respect, the petitioner has raised a new objection in this court to the effect that the compensation payable for the said lands was agricultural property, that Section 24 of the Finance Act, 1969, which amended Section 2(e) of the Wealth-tax Act by including agricultural land in the definition of "assets" was unconstitutional, and that the assessment of such an asset under the Wealth-tax Act was illegal and without jurisdiction. This objection can be summarily rejected, first, for the reason that the Supreme Court has held that the above amendment is valid and constitutional, and, secondly, for the reason that the contention that compensation payable for agricultural lands vested in the Government continues to be an agricultural asset is totally unsustainable.

(3.) THE penalty notice, exhibit P-2, is illegal on the face of it. It is in a printed form, which comprehends all possible grounds on which a penalty can be imposed under Section 18(1) of the Wealth-tax Act. THE notice has not struck off any one of those grounds; and there is no indication for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. Even in the counter-affidavit filed by the second respondent, he has not stated for what specific violation he issued it. It is not that it would have saved his action. Apparently, exhibit P-2 is a whimsical notice issued to an assessee without intending anything.